FAO Fisheries and Aquaculture Circular No. 1089
FIPM//C1089 (En) ISSN 2070-6065
ECONOMIC ANALYSIS OF SUPPLY AND DEMAND FOR FOOD UP TO 2030 – SPECIAL FOCUS ON FISH AND FISHERY PRODUCTS
FAO Fisheries and Aquaculture Circular No. 1089
FIPM/C1089 (En)
ECONOMIC ANALYSIS OF SUPPLY AND DEMAND FOR FOOD UP TO 2030 – SPECIAL FOCUS ON FISH AND FISHERY PRODUCTS by Mr Audun Lem Branch Chief Products, Trade and Marketing Branch Fisheries and Aquaculture Policy and Economics Division Food and Agriculture Organization Rome, Italy Mr Trond Bjorndal Aalesund University College Aalesund, Norway SNF Centre for Applied Research at NHH Bergen, Norway Ms Alena Lappo Consultant Products, Trade and Marketing Branch Fisheries and Aquaculture Policy and Economics Division Rome, Italy
FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2014
The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO. ISBN 978-92-5-108400-7 (print) E-ISBN 978-92-5-108401-4 (PDF) © FAO, 2014 FAO encourages the use, reproduction and dissemination of material in this information product. Except where otherwise indicated, material may be copied, downloaded and printed for private study, research and teaching purposes, or for use in non-commercial products or services, provided that appropriate acknowledgement of FAO as the source and copyright holder is given and that FAO’s endorsement of users’ views, products or services is not implied in any way. All requests for translation and adaptation rights, and for resale and other commercial use rights should be made via www.fao.org/contact-us/licence-request or addressed to copyright@fao.org. FAO information products are available on the FAO website (www.fao.org/publications) and can be purchased through publications-sales@fao.org.
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PREPARATION OF THIS DOCUMENT This report contributes to FAO’s ongoing activities and forecasts of food demand and supply. There is much concern about future food supply and demand on the basis of expected population growth as well as due to the large number of people still suffering from undernourishment. At the same time there are limits to the potential for expanded production from fisheries, aquaculture and agriculture. What is often overlooked in many studies is the economic impact of changes in supply and demand for example due to changes in food prices, household income and consumer preferences. This analysis takes an economic approach in analysing supply of and demand for food up to 2030, with a particular emphasis on fisheries and aquaculture.
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Lem, A., Bjorndal, T. & Lappo, A. 2014. Economic analysis of supply and demand for food up to 2030 – Special focus on fish and fishery products. FAO Fisheries and Aquaculture Circular No. 1089. Rome, FAO. 106 pp. ABSTRACT With the world’s population expected to reach 8.2 billion people by 2030, and with 842 million people estimated as having been undernourished in the period 2011–13, food supply will present a growing challenge in the next two decades. With increases in income along with demographic changes related to family size, population ageing and urbanization, and consumer trends such as concerns for healthy eating and sustainable production, there will be great shifts in demand and major changes in the composition of demand. This will in turn have an impact on food supply, which will need to both increase and become more efficient if it is to grow within the constraints presented by the availability of natural resources and existing technology. This publication presents projections of future food supply up to 2030, building on existing analyses but also providing more economic perspectives on the future evolution of food production. It thus looks at the main drivers of future demand and supply, with a particular focus on fisheries and aquaculture production. The analysis is supplemented with a number of new scenarios on fish production in the period until 2022.
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CONTENTS
Preparation of this document Acknowledgements Abbreviations and acronyms Executive summary
iii vii viii ix
1.
INTRODUCTION
1
2.
POPULATION 2.1 Future population growth 2.2 Summary and discussion
2 2 6
3.
DEVELOPMENT IN GROSS DOMESTIC PRODUCT 3.1 Future GDP growth 3.2 GDP per capita 3.3 Impact on food demand
9 9 12 14
4.
UNDERNOURISHMENT AND HUNGER 4.1 Hunger 4.2 Geography of hunger and its development over time 4.3 The fight against hunger 4.4 Role of agricultural growth in reduction of hunger and malnutrition 4.5 Summary and discussions
17 17 18 20 21 22
5.
IMPACT OF CHANGES IN PRICE AND INCOME ON FOOD DEMAND 5.1 Empirical demand studies for food products 5.2 Summary and discussion
24 25 29
6.
CONSUMER TRENDS AND PREFERENCES IN THE DEMAND FOR FOOD 6.1 Background 6.2 Safety and health benefits 6.3 Corporate social responsibility 6.4 Production systems and innovation 6.5 Sustainability 6.6 Country and region of origin 6.7 Summary and discussions Food safety and health benefits Corporate social responsibility Production systems and innovations Sustainability Country and region of origin Discussion
31 31 32 34 35 38 40 41 42 43 43 43 43 43
7.
SUMMARY – DEMAND SIDE
45
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8.
FISHERIES AND AQUACULTURE PRODUCTION 8.1 World production of fish from 1950 to the present 8.2 Capture fisheries 8.3 Usage 8.4 Aquaculture 8.5 Global fish exports and imports 8.6 The potential for increased production Climate change Capture fisheries Aquaculture
48 48 49 51 54 57 59 59 59 60
9.
AGRICULTURE 9.1 Historical production 9.2 Production projections 9.3 Trade 9.4 Constraints 9.5 Productivity 9.6 Summary
61 61 64 65 69 71 72
10.
SUPPLY CHAINS 10.1 Typical supply chains for domestic and international markets 10.2 The value chain approach 10.3 Relationships among agents along supply/value chains 10.4 Scope for efficiency improvements in supply chains 10.5 Summary
74 74 75 76 77 79
11.
SUMMARY – SUPPLY SIDE
80
12.
FUTURE MARKETS 12.1 Production 12.2 Prices 12.3 Fishmeal and fish oil Fishmeal Fish oil Analysis
84 85 89 92 92 96 98
13.
REFERENCES
100
14.
APPENDIX 14.1 Demand elasticities for scenario 5
105 105
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ACKNOWLEDGEMENTS A number of persons have contributed to this publication. Thanks are due to Professor M. Day, who commented on and provided material for Chapter 5. Professor JosĂŠ Fernandez Polanco assisted with research for Chapter 6. Dr Achini de Silva and Ms Anna Child provided essential background information and important research assistance for Chapter 10. Dr Pierre Charlebois prepared the extra scenarios presented in Chapter 12 with the FAO fish model. He and Ms Stefania Vannuccini gave invaluable assistance in the interpretation of the results. Finally, Mr Felix Dent and Ms Anna Child are acknowledged for their work in editing parts of the document.
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ABBREVIATIONS AND ACRONYMS CSR DHA EPA GAEZ GDP HACCP IMF IUU MDG MSC NGO OECD PDO TFP WFS
corporate social responsibility docosahexaenoic acid eicosapentaenoic acid Global Agro-Ecological Zones (methodology) gross domestic product Hazard Analysis and Critical Control Point (system) International Monetary Fund illegal, unreported and unregulated (fishing) Millennium Development Goal Marine Stewardship Council non-governmental organization Organisation for Economic Co-operation and Development protected denomination of origin total factor productivity World Food Summit